Answer:
Sell to ABC corporation.
Explanation:
Here we have two options which is either sell the farm to ABC for $500,000 today or sell it to XYZ for $530000 receivable after a year.
Option 1. Selling to ABC
The amount received $500,000
Investing it at 10% <u> $50,000</u>
Total Value of Investment at year end $550,000
Now Option 2. Selling to XYZ
The amount received <u>$530,000</u>
Total Value of Investment at year end $530,000
As the benefit to sell ABC is more than XYZ corporation hence its better to sell the farm to ABC corporation.
Answer:
partial measure
Explanation:
Based on the information provided it can be said that the kind of productivity measure that can be used would be a partial measure. Partial Productivity measure relates output to a single input unit. For example, capital productivity deals with output per unit of capital while energy productivity relates output per joule of energy used. In this scenario, we would need labor productivity which is output per hour worked.
Based on the probability distributions of the funds and the correlation, the following is true:
- Investment proportions would be 33% Equity and 67% debt.
- Standard deviation would be 21.16%.
<h3>What would be the Investment proportions?</h3>
The expected return can be found as:
= (Return on stock x Weight of stock) + (Return on debt x Weight of debt)
As we already have the return as 12%, we can solve the formula for weights :
12% = (16% x Weight of equity ) + (10% x Weight of debt)
12% = (16% x W of equity ) + (10% x (1 - W of equity))
12% = 0.16W + 10% - 0.1W
2% = 0.06W
W = 2% / 0.06
= 33%
Equity is 33% so Debt is 67%.
<h3>What would be the standard deviation?</h3>
= √(Weight of stock ² x Standard deviation of stock ² + Weight of debt ² x Standard deviation of debt² + 2 x standard deviation of stock x standard deviation of debt x Correlation x weight of stock x weight of debt )
= √(33%² x 34% ² + 67%² x 25%² + 2 x 34% x 25% x 0.11 x 0.33 x 0.67)
= 21.16%
Find out more on portfolio standard deviation at brainly.com/question/20722208.
Answer:
C. $6,000; Increase expenses, increase liabilities
Explanation:
The computation is shown below:
= Borrowed amount × rate of interest × given months ÷ Total months
= $400,000 × 6% × 3 months ÷ 12 months
= $6,000
So this $6,000 represent an increase in liabilities and increase in expenses
hence, the correct option is c.